Congenital heart defects are the most common type of birth defects in the United States. An underlying pathology is often improper differentiation of cardiac progenitor cells during early cardiogenesis. Various committed endpoint lineages including cardiomyocytes, smooth muscle cells, endothelial cells, and specialized conduction cells, arise from cardiac progenitor cells to compose the mature heart tissue. Although transcription factors involved in cardiac progenitor cell differentiation have been described, the closely associated chromatin modifiers of this process remain largely unknown. Histone deacetylases (Hdacs) modify chromatin structure to regulate gene expression in the heart and elsewhere. Our recent findings suggest a novel role of Hdac3 during early cardiogenesis. We find that deletion of Hdac3 in cardiac precursor cells in mice results in complete embryonic lethality and severe cardiac developmental defects, including atrial and ventricular septal defects and hypoplastic ventricles. Strikingly, genetic deletion of Hdac3 in differentiated cardiomyocytes did not cause these defects, suggesting a specific role for Hdac3 in cardiac precursor cells. We have further found that Hdac3-deficient cardiac precursor cells precociously and preferentially differentiate into the cardiomyocyte lineage. The overall goal of this proposal is to investigate and define mechanistic functions of Hdac3 in cardiac progenitor cells during early cardiogenesis. In Aim 1, we will characterize the functional significance of Hdac3 and Tbx5 interaction during early cardiogenesis. In Aim 2, we will elucidate opposing roles of Fgf8 and Bmp4 signaling on Hdac3 function. In Aim 3, we will define the function of Hdac3 in multipotent cardiac progenitor cells. The set of experiments outlined in this proposal have broad significance not only for understanding the fundamental mechanisms that regulate pluripotency and lineage specification of cardiac progenitor cells, but also could be highly applicable to the entire field of regenerative medicine.